Voluntary Benefits
Get It Together:
A New Approach to Employee Benefits
Product Integration Simplifies Administration
and Offers Flexible Funding Options

by Tom O’Keefe

Some of the greatest challenges in the employee benefits industry are simplifying what may be complex, streamlining what may be unwieldy, and providing clear communication of what may be confusing.

In recent years, the need to do these things has accelerated as benefit trends put more responsibility on employees to choose their own coverage. At the same time, budget pressures have left employers seeking solutions that allow them to offer broad benefit choices without adding to their costs or administrative tasks.

The response to these challenges is the drive toward integrated benefit platforms. With integrated benefit platforms, multiple products and funding options are offered on a single administrative system. Effective benefit education is provided on a single path from quote to enrollment to ongoing administration.

Carriers that are developing integrated benefit offerings recognize that the market is evolving with the breadth of employee benefit choices and funding options as well as the complexity that can go along with them. To be successful, we have to make these benefits easier for employers to manage.

Why Integration?

Some pretty dramatic changes in how employers are offering benefits and how employees are choosing them is driving the integrated approach. The days are numbered for standard-issue benefit packages, regardless of the employee’s needs or situation in life and cost shifting is a major reason. As employers share some of the costs of their benefits with employees, their employees have choices to make: what kinds and how much coverage to choose or even whether to have any coverage at all.

Choice is generally a good thing. The modern workforce is tremendously diverse and employees value the opportunity to select the benefits that suit them best. And because they are footing some of the bill, employees rightly expect to have a voice in how their benefit dollars are spent.
But as good as it is, choice has a downside: complexity. In a company of hundreds of people, there may be hundreds of variations in the benefit plan. A 50-something Baby Boomer may choose long-term care coverage while the generation X 30-something may choose critical illness coverage, and the generation Y 20-something may choose accident insurance. These benefits may be paid for by the employer, the employee, or by a little bit of both.

Our industry has done a pretty good job of keeping up with all these shifts. We have offered innovative products to meet a variety of employee needs; we have put a strong emphasis on helping employees understand their growing list of benefit choices; and we’ve developed an array of funding options.

In short, we focused a lot on meeting the needs of employees whose characteristics are all over the map and who are making more benefit decisions and picking up more of the costs than ever before.
Now our industry is heading over the next hurdle: Deconstructing the increasingly complex benefit challenge for employers and building new ways to make a broad range of benefits easier to manage. At the same time, we’re creating ways to cut costs and make budgets more predictable – a critical need for employers that are on the front lines of the benefit balancing effort.

Defining the Benefits

There are a couple of ways our industry describes the concept of integrated benefits; one is to group several different benefits into a single streamlined platform that simplifies administration; another is to combine employer-paid and employee-paid coverage on a single platform. The best approaches to integrated benefits offer both and they do so in a way that can bring real advantages for brokers, employers, and employees.

The Benefits For Brokers

Integrated benefits give brokers a powerful differentiator in the market. As the benefit landscape has shifted, the broker’s role as an objective adviser to employers has become even more valuable. When employees are making their own benefit decisions, employers need more than just a list of product options. They need help identifying carriers with the right education, technology, and service infrastructure.

It’s relatively straightforward to present products -- assemble a spreadsheet and bring it to a client. But integrated benefits allow brokers to present benefit package solutions with a single path for quoting, education, enrollment, and ongoing billing and administration. And the broker answers concerns about product choice, employee education, cost predictability, and funding options.

It also eliminates much of the back-and-forth paperwork, administration, and enrollment tasks that brokers so often get pulled into. Online administration allows employers to make changes and handle billing without tying up the broker’s time. Since a comprehensive employee education and enrollment process is part of the integrated benefit package, it’s no longer on the broker’s to do list.

The Benefits for Employers

There is no denying that employers are stretched by the normally demanding feat of juggling budgets and benefits. Putting a suite of products on a single platform simplifies benefits by combining common benefit enrollment, education, billing, and life changes across all products. It also provides a blend of funding options to give employers more flexibility in controlling and predicting costs.
Many employers have been discouraged from trying worksite products because of the perceived complexity. But the new integrated benefit approach is helping address that perception while offering broad benefit choices, funding flexibility, and simplicity. When it’s just as easy to administer employee-paid benefits as it is to administer employer-paid benefits, employers have funding options and product combinations they might not have been willing or able to consider otherwise.

The Benefit To Employees

One of the greatest advantages of the integrated approach is that the employees’ perception of a benefit package, as a single element, actually matches the reality of how their benefits are enrolled and managed. An integrated approach offers a seamless continuum of experiences in obtaining coverage, which includes education to help employees understand what their benefits do, how they work, and why they’re needed.

Employees need effective and clear benefit education as they make more decisions about their coverage and pick up more of the tab for their benefits. They need information to select the products that will make up their financial safety net.

Research clearly shows a direct connection between how well employees understand their benefits and their perception of -- and loyalty to -- their employer.

In a Unum survey of more than 1,100 workers, employees who said they got quality benefit education were nearly twice as likely to say their employers cared about their well-being and 70% said their employers valued their work. In contrast, just 41% of employees who listed their benefit education as fair or poor said they believe their work is valued.

What’s Next For Integrated Benefits?

For the moment, carriers are focused mainly on offering integrated approaches that simplify the enrollment, administration, and funding of their own products.

But as the trend picks up steam, employers will be looking for the same kind of support for all of the products they offer employees, regardless of the carrier. Once the integrated benefit approach is solidly established, look for more carriers to develop solutions that apply that integration to products beyond their own portfolios.

As the benefit landscape has shifted, the integrated benefit market has come a long way and the pace of change does not look likely to slow anytime soon.
––––––––––
Tom O’Keefe is senior market manager, Unum, San Francisco. Unum’s integrated benefits platform operates on a single, streamlined technology platform, Simply Unum, provides a base of group disability and life insurance coupled with voluntary benefits. And it offers online administration, so employers can manage benefits on their own time – even if that time is outside the confines of regular business hours. The national rollout of Simply Unum was completed in February. For more information, visit http://www.unum.com/Brokers.